Republican calls for transparency should apply now to our existing MCCA
Republican lawmakers, calls for transparency and the Michigan insurance industry are three things that normally (read: next to never) don’t go together.
But based on Republican-backed legislative proposals from last year for a new MCCA-type body in this state, that could change.
In two separate proposals in 2014, Republican lawmakers suggested far-reaching “transparency” measures for a new, incorporated MCCA-type organization that’s nearly identical to the existing MCCA.
Specifically, they proposed that the new MCCA-type organization “shall comply” with the Michigan Freedom of Information Act and show us the numbers. (See Speaker Bolger’s and the House GOP’s draft “Substitute for House Bill 4612” and Senate Bill 1148)
Consumer protection groups and attorneys who practice insurance law and No Fault law already strongly agree with calls for greater transparency.
Also, Democratic lawmakers have repeatedly called for very similar measures (see Senate Bill 102 (2013) and House Bill 4551 (2013)), but the application of FOIA to the MCCA is the subject of another very important lawsuit that may be heard by the Michigan Supreme Court.
For more information, take a look at my blog posts on the issue:
- Sen. Glenn Anderson says reforming the MCCA would ‘protect drivers’ and ‘lower rates’
- Pressure for transparency builds for Michigan Catastrophic Claims Association (MCCA)
- MCCA transparency case deserves ‘supreme’ review
Additionally, Republican lawmakers in 2014 proposed that the new MCCA-type organization prepare an annual financial statement that would include the following information:
- “The number of claims opened and closed in the year, the amount expended on the claims, and the anticipated future costs of the claims, with the assumptions, methodology, and data used to make the future projections.”
- “The total number of open claims and their anticipated future costs, the assumptions, methodology, and data used to make the future projections, a categorical summary of claims paid, both open and closed, and the expected future costs of claims grouped by numeric range.”
- “The number of new claims projected for the upcoming year, if any, their anticipated future costs, and the assumptions, methodology, and data used to make the future projections.”
- “The current ratio of claims opened to claims closed.”
- “The average length of a claim.”
- “A statement of the current financial condition of the incorporated association and the reasons for any deficit or surplus in collected assessments compared to losses.”
- “A statement of the assumptions, methodology, and data used to make revenue projections.”
- “A statement of the assumptions, methodology, and data used to determine the incorporated association’s annual assessments.”
- “The total amount of the incorporated association’s discounted and undiscounted liabilities and a description and explanation of the liabilities, including an explanation of the association’s definition of the terms ‘discounted’ and ‘undiscounted.’”
- “A summary of services for which claims were paid and the average cost for the services.”
- “Measures taken by the incorporated association, if any, to contain costs.”
- “Measures taken by the incorporated association, if any, to reduce any deficit …” (See Speaker Bolger’s and the House GOP’s draft “Substitute for House Bill No. 4612” and Senate Bill 1148)
In light of the Republican’s extensive transparency proposals, and similar proposals by Democrats, consumer groups and Michigan insurance attorneys, my question is this:
If the transparency measures proposed last by Republican lawmakers are appropriate enough for a new, incorporated MCCA-type organization, why shouldn’t these same transparency measures be enacted now – and applied to the existing MCCA?
Hopefully, in the upcoming legislative session, Republican lawmakers will provide an answer.
What is the Michigan Catastrophic Claims Association?
The purpose of the MCCA – and the new, incorporated MCCA-type organization – is to pay for the No Fault benefits of Michigan auto accident victims who have been catastrophically injured.
The funds used to pay for catastrophically injured auto accident victims’ No Fault medical benefits originate with Michigan auto insurance consumers. The MCCA charges assessments to every No Fault auto insurer in Michigan and every auto insurer passes along the cost of those assessment to consumers in the form of higher auto insurance prices.
